Summary
- OPEC+ may raise output by up to 500,000 bpd in November, sources say
- US crude stocks down 3.67 million barrels last week – API
- US EIA stocks data to be released as usual despite shutdown
(Reuters) – Oil prices steadied on Wednesday after falling for two days as investors weighed OPEC+ plans for a larger output hike next month, while data from the U.S. and Asia showed signs of demand waning.
Brent crude futures for December delivery were down 33 cents or 0.5% to $65.70 a barrel by 1146 GMT. U.S. West Texas Intermediate crude fell 31 cents, also down 0.5%, to $62.06 a barrel.
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Both contracts headed 1% lower earlier to their lowest since early September in the volatile trading session, after settling more than 3% lower on Monday and losing another 1.5% on Tuesday.
Oil has dropped on the market anticipating a similar size OPEC+ production increase in November to the 500,000 barrels per day (bpd) hike in September, and on U.S. and Asian demand starting to fall, Rystad analyst Janiv Shah said.
“U.S. drawdowns have slowed, so some bullish movement could start to flip,” he added.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, could agree to raise oil production by up to 500,000 bpd in November, triple the increase made for October, as Saudi Arabia seeks to reclaim market share, three sources familiar with the talks said.
However, OPEC wrote in a post on X that media reports of plans to raise output by 500,000 bpd were misleading.
Meanwhile in the U.S., an industry report showed U.S. crude stockpiles fell while gasoline and distillate inventories rose in the week ended September 26, according to market sources citing American Petroleum Institute estimates on Tuesday.
Data on factory activity in Asia, the world’s biggest oil-consuming region, also added to concerns about fuel demand, as manufacturing activity contracted across most major economies in September.
In addition, record U.S. oil production, some caution ahead of the OPEC+ meeting this weekend and a risk-off environment due to the U.S. shutdown also played a part, Giovanni Staunovo, an analyst at UBS said.
The U.S. government shut down much of its operations on Wednesday as deep partisan divisions prevented Congress and the White House from reaching a funding deal – which government agencies have warned would halt the release of a closely watched September employment report, amongst other things.
Weekly petroleum data from the U.S. Energy Information Administration will run as scheduled on Wednesday despite the federal government shutdown, the agency said.
Focus was also shifting to the supply and export disruption in Russia due to continuous and successful Ukrainian assaults, PVM Oil Associates’ analyst Tamas Varga said.
The next round of talks between the U.S. and Russia could take place before the end of autumn, the state TASS news agency reported Russian Deputy Foreign Minister Sergei Ryabkov as saying.
Reporting by Seher Dareen in London, Mohi Narayan in New Delhi; Editing by Christian Schmollinger, Jacqueline Wong, Alexandra Hudson, Aidan Lewis
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